THE outstanding debt of the national government rose to P5.98 trillion in August, up 1.4 percent or P82.49 billion from a year earlier on higher domestic and foreign obligations, the Bureau of the Treasury (BTr) data reported Friday.
Month-on-month, the government’s outstanding debt fell by 0.04 percent from P5.982 trillion in July.
The local debt component rose by 0.7 percent year-on-year to P3.88 trillion. From July, domestic debt also rose by 0.7 percent or P27 billion.
The BTr attributed the month-on-month increase in local debt to the net issuance of government securities amounting to P27.31 billion, which was slightly offset by a stronger peso against the US dollar at that time. The foreign currency revaluation reduced the value of onshore dollar securities by P270 million.
On the other hand, foreign debt increased by 2.7 percent year-on-year and declined by 1.4 percent month-on-month to P2.09 trillion.
“For August, forex adjustments on US dollar- and third currency-denominated debt reduced the peso value by P2.19 billion and P24.29 billion, respectively, adding to net repayments of P3.13 billion,” the bureau said.
Also included were adjustments for late notices of availments worth an additional P110 million, it added.
Foreign borrowings in August were priced at P46.55 to a dollar compared with P46.70 a year earlier, and P47.09 in July.
An analyst said the 1.4 percent increase in the national debt compared partly reflects the increasing value of foreign currency debt obligations in peso terms.
“This is due to the depreciation of the peso versus USD from 46.8 a year ago to around 48.3 by end-September 2016,” Rajiv Biswas, Asia Pacific chief economist at IHS Markit, explained.
Biswas noted that about 35 percent of the total debt of the Philippine government is in foreign currency, with the bulk in dollar-denominated global bonds.
As a result, the depreciation of the peso has resulted in the value of total external debt rising by 2.7 percent compared to a year earlier, a key factor that lifted the total debt by 1.4 percent year-on-year, he added.
Debt guaranteed by the national government rose by 34.2 percent to P554 billion from P412 billion a year earlier. Month-on-month, government-guaranteed debt declined by 1.5 percent or P8.40 million from P562 billion.
“The reduction in guaranteed debt was due to the combined effect of US dollar- and third currency adjustments that reduced the peso value of external guarantees amounting to P3.62 billion and P1.56 billion, respectively, on top of net redemptions amounting to P3.22 billion,” the BTr said.